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“Everyone knows they can make a killing if they get in on the ground floor of an initial public offering…” – CNBC
Initial public offerings — better known as IPOs — are exciting. That’s especially true when a private company you’re familiar with becomes tradable. But most people don’t know what they’re getting into when it comes to buying newly listed stocks…
What really happens when a company goes public is not pretty.

There’s always a lot of fanfare when it comes to Initial Public Offerings. The bunting is brought out, the trumpets sound, the people stand up with killer actor and actress smiles and the champagne is popped at the New York Stock Exchange. Then? Sometimes, the hype works, the people are still popping the fizz. But, sometimes, even when the company is doing wonders before being launched on the stock exchange, it suddenly goes all nightmarish on Wall Street and the price just belly-flops instead of doing a super-duper double flip.

One year ago tomorrow, social networking phenomenon Facebook went public in one of the most highly anticipated initial public offerings of the last decade. Leading up to the IPO, which valued the company at a whopping $104 billion — or 100 times earnings — the hype was intense. Facebook, market prognosticators predicted, would soar in the first day of trading, generating easy gains for the investors who rushed for a piece of the action.

One year ago tomorrow, social networking phenomenon Facebook went public in one of the most highly anticipated initial public offerings of the last decade. Leading up to the IPO, which valued the company at a whopping $104 billion — or 100 times earnings — the hype was intense. Facebook, market prognosticators predicted, would soar in the first day of trading, generating easy gains for the investors who rushed for a piece of the action.

In its first day as a publicly traded company, Twitter blew past everyone’s expectations — including its own. The seven-year-old social network saw its stock price soar from an initial public offering price of $26 to almost $45, an increase of more than 70 percent. After one day of trading Twitter already has a greater valuation than currently hot tech companies like Netflix and LinkedIn. The high price means Twitter underestimated the value of its own stock and likely left money on the table.

In its first day as a publicly traded company, Twitter blew past everyone’s expectations — including its own. The seven-year-old social network saw its stock price soar from an initial public offering price of $26 to almost $45, an increase of more than 70 percent. After one day of trading Twitter already has a greater valuation than currently hot tech companies like Netflix and LinkedIn. The high price means Twitter underestimated the value of its own stock and likely left money on the table.